Authorities have seized Sam Bankman-Fried’s two private jets, valued at $28.4 million, as the indicted founder of FTX, a bankrupt cryptocurrency exchange, faces trial and is considered a “flight risk.”
Despite the confiscation of the jets, Bankman-Fried, a former billionaire, reportedly never used them for travel.
The two planes seized by the government are the Bombardier Global 5000 and Embraer ERJ-135BJ Legacy 600, which cost Bankman-Fried $15.9 million and $12.5 million, respectively.
The Bombardier Global 5000 is one of the largest purpose-built private jets available, with a capacity to seat 13 passengers or sleep seven overnight, according to a listing on charter airline VistaJet’s website.
Bankman-Fried’s model of the Bombardier jet only had a wardrobe and storage cabinet, but it could be upgraded with features such as a movie theater and bedroom for long flights of up to 6,000 miles. Bankman-Fried moved FTX’s headquarters from China to the Bahamas before the trial.
The Embraer plane, which Bankman-Fried also owned but never used, can accommodate up to nine passengers and travel up to 4,500 miles at record speeds, according to the aerospace company’s website.
In a separate court filing, it is claimed that Bankman-Fried obtained the two private jets through a “handshake” deal with Paul Aranha, the chief of Trans Island Airways and the beneficial owner of Island Air Capital, the company operating Bankman-Fried’s planes.
As part of this deal, FTX loaned around $11 million to Aranha, which was subsequently repaid into an FTX customer account. Court documents state that Aranha became one of the “largest Bahamian victims” of Bankman-Fried’s cryptocurrency fraud.
Bankman-Fried was also planning to invest $17 million in TIA through FTX Ventures, which would have made him a joint owner of the Barbados-based airline.
When FTX collapsed in November 2022, the government and FTX debtors placed an automatic stay on Island Air Capital, preventing Aranha from operating or selling the jets.
It remains unclear where the Embraer jet is currently parked, but the Bombardier jet has been sitting idle at Bradley International Airport in Connecticut since late January.
A custody battle over the planes is ongoing.
FTX debtors, led by John J. Ray III, who has been serving as CEO during the bankruptcy proceedings, claimed ownership of the planes in an attempt to recover assets lost in the collapse of the cryptocurrency exchange.
TIA declined to comment on the situation.
Last month, the debtors were set to receive millions in sponsorships that had been paid out to celebrity athletes, such as Shaquille O’Neal, Stephen Curry, and Naomi Osaka. In addition, they sued Bankman-Fried’s parents for allegedly transferring and misappropriating funds.
Meanwhile, Bankman-Fried’s six-week trial is underway, with former colleagues and friends testifying about FTX’s downfall.
Former FTX developer Adam Yedidia testified that he raised concerns about the large amount of debt owed by Bankman-Fried’s trading firm, Alameda Research, to FTX just before the exchange collapsed.
Yedidia recalled a meeting at a luxury resort where Bankman-Fried admitted that his companies were no longer “bulletproof.” Bankman-Fried appeared nervous during the meeting, according to Yedidia.
Gary Wang, the co-founder of FTX and Bankman-Fried’s former college roommate at MIT, testified that Bankman-Fried instructed him to write computer code that allowed Alameda to withdraw “unlimited” user funds from FTX, without users knowing.
Wang, who pleaded guilty and is cooperating with prosecutors, revealed this information during his testimony.
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